In the digital era, where the tech giants that form the so-called FAANG Stocks (an acronym for the five most popular tech stocks which comprise Facebook, Apple, Amazon, Netflix and Alphabet’s Google) seem to be conquering the globe with a frictionless effort, that is the farest from the truth it can get.
Those companies spend massive amounts of resources which spans from product development, and engineering but also and primarily on distribution, sales, and marketing.
To give you a bit of context in 2017 Alphabet’s Google spent 11.6% of its revenues in sales and marketing activities. This implies almost thirteen billion dollars!
What activities has Google been focusing on in 2017? Some of those activities comprise:
- Advertising and promotional expenditures related to its products and services;
- Compensation expenses for employees engaged in sales and marketing, sales support, and other customer service functions.
For instance, if we compare 2016 with 2017 Sales and marketing expenses increased by over two billion primarily due to an increase in advertising and promotional costs of over a billion especially resulting from increases in marketing and promotion-related expenses for our hardware products, Cloud offerings, and YouTube.
Thus, if you thought that large tech companies could get along with the power of products and engineering alone, you got it all wrong. See for instance how Google uses its main asset, the search page to sponsor one of its products:
I pointed out already in this blog how Google spent a massive effort in creating a distribution for its products and how Google spends great resources to acquire qualified traffic toward its search results pages.
Marketing vs. Sales
In Marketing vs. Sales a cleared out the distinction between the two activities and when it makes more sense for an organization to leverage on marketing rather than sales and vice-versa.
While it is essential to understand the difference between marketing and sales, it is also critical to understand how they work together.
Marketing and Sales working together
As Peter Drucker pointed out in his book Drucker Management, “there will be always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.”
While marketing can get to the point of understanding the customer and make sales team superfluous – to a certain extent.
The sales team though is a critical link between the marketing department and the customers. Salespeople are involved in the whole process of and customer journey at a personal level.
Indeed, not only the salesperson might speak to the potential customer in the most delicate moment when she/he is deciding whether it makes sense to purchase your product or service. But it assists the customer throughout the entire process.
For instance, a critical moment of the whole customer journey is when she/he needs assistance or support. While this phase might be in part automated, in most cases you’ll need a support team, which is often sales oriented to assist the customers.
In those phases, you can unlock many insights about the customers that marketing will never manage to have with automation alone. That is when sales and marketing come together to create a customer-centric journey.
In what other ways than sales and marketing work together?
The usual funnel sees it the marketing department in charge of giving to the sales team a list of leads (people that might be interested in your product or service) they can work on and bring them in as customers. While this is the traditional process, it is important to remark that often the opposite happens.
For instance, if you take the sales canvassing process that allows the company to acquire customers that have never heard about your brand. In that scenario, a sales team can give valuable insights to the marketing team on where to focus their attention and understand the areas where the marketing activities of the company might be improved.
In the era of AI and machine learning, it’s easy to assume that automation should come before anything else. However, automation, if done with no coordination between the marketing and sales teams, it doesn’t add any value.
If at all it can create irreversible damages to your brand. Therefore, before you set up any automation, you need a deep understanding of your customers, your product, your value proposition, and the whole journey customers take to go from the first touch point with your brand up to the referral stage and on.
Thus, before the marketing department creates any automation you need them to coordinate as much as possible with sales team to make sure the automation process leverages on customer insights that only the sales force, which is in touch with the customer base on a daily basis – has at its disposal.
Many believe that all you need is a viral marketing campaign to make the lead acquisition process smooth and inexpensive. However, even though viral marketing can do that, you might initially need intense coordination between sales and marketing (and engineering) to understand what part of your product might carry some virality.
For instance, if you run a SaaS business in some cases, it might make sense to create a free version of the product (the so-called freemium model) that becomes an essential part of the lead generation process.
However, what features, or how much volumes can you offer for free to acquire enough customers? A/B testing and big data will help. However, to set it up correctly you need insights from the sales teams.
Those mentioned above are just some of the activities for which sales and marketing working together can really create an effective strategy for the growth of your brand and business.
Therefore, even though it makes sense to understand and keep a clear distinction between sales and marketing so that each of them can focus on specific aspects of the business with accountability and set results.
On the other hand, it is critical to understand the level of coordination that sales and marketing can achieve.
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